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Stimulus Plan Spending Scheduled till 2018

The Stimulus Plan was a historic step to boost the economy of the United States and to provide relief to millions of people. This plan was enacted into a law in February 2009 and was called the American Recovery and Reinvestment Act of 2009. Following the proposals of President Obama, this Stimulus plan having a total nominal worth of $787 billion consists of various spending in different sectors and also many tax cuts. All these steps are for boosting the markets and stimulating the slow economy of the country.

Many experts have studied the Stimulus Plan and commented on its effects and drawbacks. The Congressional Budget Office has predicted that the Stimulus Plan spending will continue till the year 2018. Their observations are based on several aspects comprising the Stimulus Plan and the time it will take for it to show the required effects. In the immediate future the stimulus plan will increase employment and economic output, but by 2019 the GDP will show a decrease of around 0.2%. The spending also will take place over time, but about 64% which amounts to $525 billion is supposed to take place by September 2010. The actual goal was a spend of 75% during that time frame, but this deficit is predicted to be caused by procedures of government contracting.

The spend alloted for Infrastructure is a total of $80.9 billion out of which $51.2 billion is for core investments like highways, bridges and railways and also building of schools. All these activities require to go through the procedures of government contracting which will take time. This slow down could be the primary reason for the 11% deficit in spending by September 2010.

Also if we take the spending category for Energy, $33 billion has been alloted for renewable energy and for smart power grids a sum of $12 billion. For these amounts to work through the pipeline and for the projects to get completed it will take till 2018 or even more. It is estimated that renewable energy projects spending will be more or less in equal amounts spanning 2014 through 2018.

If we also consider the magnitude of the different projects on which the stimulus plan amounts have to be spent, it will definitely continue till the year 2018. If we just take the projects for renovating public schools, only a fraction of the amount allocated will be spent by September 2010. The majority of the renovation and spends will come after September 2010 and will last up to 2018.

Although the majority of categories are to spend their amounts in the first two years, experts feel that it wont be possible to do so. The process of spending will have to be kept in tune with the economic growth and the spending power of the people at large. The increase in the spending capacity of people is not going to happen in a couple of years and will take a slow growth of the markets to achieve this. Correspondingly the amount has to spent for boosting the markets in each sector.

Tags: government, law, market, Stimulus, tax

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